Secondary Sources: German Lessons, Good News for Puerto Rico

Teachable Moment:Timothy Taylor looks at whether Germany, where the jobs picture has improved steadily over the past few years, has anything to teach other countries about shaping up their labor markets. Or, is the formula unique to the world’s fourth-largest economy? The answer seems to be that some remedies could be transferable, but constitute strong medicine that won’t go down easy. Mr. Taylor writes: ”Having productivity growth outstrip wages over time, so that labor costs relative to competitors fall, isn’t easy. Reorganizing industry around global supply chains that include suppliers from lower-wage economies isn’t easy. Increasing inequality of wages isn’t easy. The “structural labor market reforms” that include trimming back on early retirement and unemployment insurance isn’t easy. U.S. discussions of economic policy sometimes make it sound as if the government can just “create jobs” with large enough spending and/or tax cuts, or low enough interest rates. But real and lasting solutions to reducing unemployment and keeping it low aren’t that easy.”

Hope for Puerto Rico: Warm weather notwithstanding, it has been a cold winter for the U.S. commonwealth. Puerto Rico’s precarious economy and budget deficits have investors fretting that the island’s debt could be restructured. Fitch Ratings this week cut Puerto Rico‘s general-obligation bonds to double-B from triple-B-minus. But new research from the Federal Reserve Bank of New York finds a shard of economic hope: The island’s employment and economic conditions aren’t “as gloomy as they appear,” according to New York Fed research officer, Jason Bram.

To be sure, things are far from sunny. At the outset, Mr Bram says “If there were officially designated recessions for the Commonwealth, it probably would have been in one for the better part of these past seven years.”

However, upward quarterly revisions–due from Bureau of Labor Statistics in March– may show that Puerto Rico has lost about 3% fewer jobs than initially estimated in the past few years. That means, for example, that the estimate of 44,000 jobs lost between June 2012 and June 2013 could be revised up to around 10,000 jobs.

Mr. Bram cautions that such potential good news comes amid a tarnished picture. In Puerto Rico, “overall employment is still down by well over 10 percent from its 2006 peak and has yet to show any meaningful sign of an upturn. Moreover, the comprehensive employment data only go up to mid-2013, and it is certainly conceivable that there has been renewed weakening very recently.”

Police Report: Female officers make for better local policing. That’s the conclusion of a study of more than a decade of the integration of women into the U.S. police force.

Having more women in the force helped contain the rise in domestic violence, according to Amalia R. Miller, of the University of Virginia, and Carmit Segal, of the University of Zurich. They write that more women police officers also resulted in “significant declines in intimate partner homicide rates and in rates of repeated domestic abuse.”

The researchers studied data from the late 1970s through the early 1990s, a time when “the share of female officers in major U.S. police departments nearly tripled from 3.4% to 10.1%.”

The authors write, “the change in the sex composition of law enforcement during the late 1970s and 1980s had a meaningful impact on reducing the ultimate escalation of domestic violence, possibly because of the substantial increase in reporting rates and changes in police officer behavior.”

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